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Spotify CEO Daniel Ek shares thoughts on Apple’s DMA policies with investors | TechCrunch


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Spotify CEO Daniel EkPhoto Credit: TOBIAS SCHWARZ/AFP/Getty ImagesSpotify, a vocal critic of Apple, unsurprisingly came out in support of Apple after announcing its stance on the EU's new Digital Markets Act, or DMA, calling Apple's plan “a takeover” and “a complete and utter failure.” In Spotify’s Q4 2023 earnings call, CEO Daniel Ek was vague about the new law’s impact on the company’s revenue, stating that there is nothing wrong with its current position with Apple and instead highlighting potential future opportunities. Spotify joins other opponents of the new law, such as Epic Games, Mozilla, and Microsoft, who have raised concerns about Apple’s implementation. While Apple adheres to the letter of the law by opening its software to new app stores and payment methods, critics argue that it does not follow the spirit of the law, which aims to promote greater competition. Apple’s new terms include the Core Revenue, requiring developers to pay €0.50 per year for each first annual subscription over 1 million, irrespective of their distribution method. Additionally, it covers transactions related to digital goods and services on the manufacturer’s website within seven days of the user using the in-app link to make the purchase. Ek took to social media to criticize Apple’s response, labeling it a “masterclass in perversion” and warning that Spotify “cannot afford to pay for this” if it wants to “be a profitable company.” During the investors’ quarterly earnings call, he reiterated this sentiment, describing Apple’s solution as something “no smart designer” would choose. However, he downplayed the potential impact of Apple’s rules on Spotify’s business or revenue, stating that the company can continue in its current state when the new law takes effect. Additionally, Ek mentioned potential positives resulting from the new competition, suggesting that there are “futures” in the new rules that could be “very important” for Spotify. The company previously announced its plans in a blog post, highlighting how DMA could enable features like high-end clubs and authorizing creators to download Spotify’s apps directly from its website. Ek confirmed that this would include fan clubs and in-app purchases for things like audiobooks, which could have a “meaningful” impact on Spotify’s earnings, considering the current 30% revenue sharing with Apple. Spotify continues to strive for profitability and aims to leverage the new rules to its advantage. Ek expressed hope that the European Commission would intervene and allow Spotify to utilize the iOS ecosystem more effectively, emphasizing the potential benefits for consumers and producers.

February 6, 2024
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